Five American banks were rejected during the stress tests conducted by the Fed. The Federal Reserve, in fact, rejected the plans on capital and dividends of five institutions on which Citigroup stands out, which was rejected the request to reward shareholders with dividends and share buybacks.
Among the other banks rejected, due to widespread shortcomings, are the US subsidiaries of HSBC, RBS and Banco Santander, which will see their ability to pay dividends to their parent companies limited. The fifth bank rejected was the regional Zions Bancorporation.
Another 25 US financial players pass the Fed's test unscathed, starting with JP Morgan and Morgan Stanley, up to American Express, Bank of America and Goldman Sachs who were, however, forced to adjust their capital plans. For Citigroup, on the other hand, this is the second "no" received by the Fed: the rejection also sank the stock, which lost 5% after the market.
“We are deeply disappointed – commented Citigroup CEO Michael Corbat -. We will continue to work with the Fed to better understand his concerns." The Fed has negatively assessed the bank's capital planning practices, starting with the bank's inadequate ability to forecast losses and revenues in a crisis scenario for its global assets.
